SWOT Analysis of Doordash | Doordash Strengths,weaknesses, Opportunities and Threats

1. What is DoorDash?

DoorDash is an American on-demand food delivery service. It is an online marketplace where customers can order food items from local restaurants via the internet.

DoorDash was founded by Stanford students Tony Xu, Stanley Tang, Andy Fang and Evan Moore.

It’s was founded in Palo Alto, California with its Headquarters in San Francisco, California, United states.

2. How is Business Model for DoorDash?

Customers can order food online from their favorite restaurants in the area. DoorDash helps deliver food to customers using their own employees but DoorDash employees are called Dashers.

Dashers get to be their own boss and work when they want. They can choose the restaurant to deliver from and how much they want to deliver.

DoorDash delivers on time, with great food and save on business costs.

It uses a technology platform which allows delivery drivers to pick up orders quickly, pay their taxes, and get paid quickly. Many customers can use this service without having to leave home.

DoorDash uses barcode scanner readers to scan customer’s mobile phones in order to verify that they are authorized users of DoorDash before making delivery.

This allows DoorDash to automate payments between dasher and restaurant on behalf of their customers.

3. How does DoorDash makes money?

a) Catering service: DoorDash takes a transaction fee for each food that is delivered to customers.

b) Profit sharing model: DoorDash does not share profit with dashers, but Dasher can choose if they want to share revenue with dashers.

c) Commission: DoorDash makes money by charging for deliveries for restaurants operating through the system. Furthermore, it collects a commission of gross order value of restaurant chains that are on board with them on each delivery.

d) DashPass; a membership program: is a subscription service that gives customers the ability to save money on delivery and service fees, its gives customers the ability to save money on delivery and service fees

e) Delivery and service fee: DoorDash collects a delivery fee for each food that is delivered to customers

f) White label logistic Service; DoorDash gives restaurants the opportunity to partner with

them and run their own business. Pricing is available upon request. In all likeliness, these

Businesses pay DoorDash a fee for every order that the company fulfills.

g) Take a cut of delivery charges for dashers:

DoorDash takes a cut of payment which Dashers receive from customers to deliver their food. This will include any service fee, tip or gratuity that the customer might have given to the Dasher directly.

4. Revenue and financials:

DoorDash offers a platform for online meal ordering and delivery. Its headquarters are in San Francisco, California.

It is the largest meal delivery firm in the United States, with a 56 percent market share. In the convenience delivery sector, it has a 60 percent market share.

The platform serves 450,000 merchants, 20,000,000 customers, and 1 million deliverers as of December 31, 2020.

The revenue of DoorDash was US$2.886 billion with a net loss of US$-0.461 billion, it also has a total assets ofUS$6.353 billion and total equity of US$4.700 billion with 3,886 number of employees

5. Partners of DoorDash:

DoorDash has the following partners;

a) Bizkey (Business information technology solutions). It helps DoorDash with market intelligence, technology, training and operations

b) Managed works (administration and finance). It helps DoorDash with administration. Dashers can use its platform to manage their business, including accounting for ecommerce payment processing, payroll and customer relationship management. It also connects them to sponsors bank accounts so that they can get paid.

c) Ordrslip: it is an online ordering platform for delivery services. DoorDash signed a long term contract with this company to provide its services.it uses GPS technology to track customer’s location when they are in the stores .it also gives information on how to reach the nearest restaurant or takeout food, its customer service is good enough.

d) Alico (a mobile payment app). It allows customers to make payments by paying registered Dashers through their smartphones for food and other items while they are at home and while they are on-the-go.

e) Dylish: It helps restaurants to use DoorDash as a delivery service. The online ordering app provides restaurant information and delivers food to customers.

f) ManageMyDelivery: It helps restaurants by ensuring the smooth operations of their business through its mobile app which lets them accept orders and track their drivers and order delivery of food.

6. DoorDash Competitors

a) UberEats; It is a big competitor of DoorDash; it is the largest online food ordering and delivery platform in the world. With its 2.51 billion USD funding round, it is set to break out as an even bigger player.

b) GrubHub; It is the second-largest online foodservice app and the first U.S.-based e-commerce company to offer restaurant takeout and delivery services.

c)) Postmates: It is based in San Francisco, California. It is the third-largest online food ordering and delivery app. It operates in 300 US cities across 44 US states, Canada, Spain, Mexico, Germany, the United Kingdom and the UAE.

d) Amazon Prime Now: It is another competitor of DoorDash. It supplies restaurant orders for customers on request within an hour.

e) Deliveroo; It is another competitor of DoorDash. It is based in UK and operates in more than 100 cities globally. It is the biggest online food-ordering and delivery app in Europe.

7. SWOT Analysis of DoorDash

Strengths of DoorDash;

a) Technology platform: DoorDash uses a technology platform which allows delivery drivers to pick up orders quickly, pay their taxes, and get paid quickly. Many customers can use this service without having to leave home.

b) Save cost: DoorDash delivers on time, with great food and save on business costs.

c) Innovative business model: Dashers get to be their own boss and work when they want. They can choose the restaurant to deliver from and how much they want to deliver.

d) Customer support with live chat: DoorDash provides customer support for constant support.

e) Save on labor costs: DoorDash allows customers to use their own employees to deliver food.

f) Profit sharing model: DoorDash does not share profit with dashers, but Dasher can choose if they want to share revenue with dashers.

g) Package delivery company: DoorDash offers bulk delivery to customers via their own employees without any extra cost.

h) Equity Crowdfunding model: DoorDash gives dashers the opportunity to invest into their business by crowd funding.

Weakness of DoorDash

a) Loss of food: DoorDash can lose money due to food being delivered, but the customer is charged for the food.

b) Restaurant bankruptcy: If a restaurant company goes bankrupt, DoorDash has to report this bankruptcy to their customers and give them a refund for the money that they have paid.

c) Dasher bankruptcy: if a dasher is going bankrupt, then they will have to leave the business and DoorDash has to find a new dasher for this restaurant

d) Employee scheduling: DoorDash gives dashers the opportunity to invest into their business by crowd funding. But Dasher has to schedule own self which make them not be able to make much profit.

e) Proprietary payment: If a dasher works for another company and the dasher takes request from such other company, such other company will not pay Dasher as DoorDash is the dasher’s employer.

f) Low regulation: DoorDash cannot regulate them as they do delivery which has too much risk that makes it difficult to keep the business safe.

Opportunities of DoorDash

a) Selling to a big fast food restaurant: DoorDash can sell their business to a bigger fast food company, such as McDonald’s.

b) Selling to a bigger company: DoorDash can sell their business to a bigger company which operates in the same market as them

c) DoorDash Express: DoorDash can start a new delivery service which does not require any Dasher, but DoorDash has to do all the delivery process.

d)  Flat fee for delivery: DoorDash can provide a delivery service from any restaurant without any charge for each food.

e) Subscription service: DoorDash can start a new subscription service which gives customers the opportunity to save money on delivery and get more rewards from DoorDash.

f) Deliver to hotels: DoorDash can start a new service of delivering food to hotel customers, but DoorDash has to find a partner in order to get benefits of this opportunity.

g) Rental car invoice: DoorDash can start a new service of booking car on behalf of their clients without any charge on the dasher’s side.

h) Delivery time prediction: DoorDash can predict delivery time for more customers and provide them with accurate information, but DoorDash has to hire more software developers in order to get benefits of this opportunity.

i) Employee shifts: DoorDash can shift their drivers over a period of 24hrs rather than the current 8 hours shift, which increases number of available dashers during off-peak hours.

j) Same day delivery: DoorDash can provide a same day delivery service for their customers in a limited area in order to get the benefits of this opportunity.

k) Automate payment: DoorDash can automate payments between dashers and restaurants on behalf of their customers, in order to get the benefits of this opportunity.

Threats of DoorDash

a) DoorDash will not be able to track food delivery business properly as they have many dashers and restaurants and they will not be able to track billions of deliveries.

b) DoorDash can lose out on their commission which is a percentage of the amount that the delivery address pays for the food, because this could increase if DoorDash loses money on each food.

c) DoorDash can lose money on all the food delivery orders because DoorDash does not have a lot of information about each food delivery.

d) DoorDash will not be able to track their dashers as DoorDash has a lot of dashers and it will be hard for them to check the performance of every dasher.

e) DoorDash will not be able to provide feedback on each dasher because they have too many dashers, but they do give DASH to the dashers which DASH is paid for delivery of food.

f) DoorDash will not be able to provide feedback on each driver as they have too many drivers, but they do reward the dashers which DASH is paid for food delivery.

g) DoorDash has a risk of food delivery going bad and customers having bad experiences. the DASH that dashers receive for their service will be decreased if customers have bad experiences and this may cause lost revenue for DoorDash.

h) DoorDash has a risk of customer default but DoorDash can refund customers who have bad experiences if this happens, but DoorDash has to pay any cost for this purpose too so it will increase Door Dash’s cost and can reduce profit for them too.

DoorDash FAQS

a) How does DoorDash work?

DoorDash is a startup company that transports food from restaurants to customers by using their own software.

b) How does DoorDash make money?

DoorDash makes all the money from customers through their subscription service and they do not share any profit with dashers

d) How safe is the food delivery service?

DoorDash has a risk of employee theft as dashers need to deliver food to customers themselves and if they steal any food, then they will have to pay the stealing fee.

e) Can DoorDash be profitable?

DoorDash has a huge opportunity to be profitable if they reduce the risk of delivery and make it easy for customers to use DoorDash.

f) Can DoorDash be sold to a bigger company?

DoorDash has a huge opportunity to sell their business to a bigger restaurant chain, such as McDonald’s.

g) How do dashers get DASH?

DoorDash gives dashers DASH as reward for delivery of food, and this will increase if they receive good feedback from customers and they only pay the dasher for delivery.

h) What are the benefits of working with DoorDash?

DoorDash gives dashers DASH as reward for delivering food and this will increase if they receive good feedback from customers and they only pay the dasher for delivery.

i) What are the disadvantages of working with DoorDash?

DoorDash does not give all the information to their dashers and they have no benefits for their dashers, so most dashers quit at DoorDash.

j) How does DoorDash reduce risks?

DoorDash can reduce risks by giving feedback on each dasher and customer, but they do not share any profit with their dashers which means they do not provide any benefits to their dashers.

J) Is there a monthly fee for DoorDash?

No, there is no monthly fee to work for DoorDash.

k) What are the disadvantages of DoorDash?

DoorDash does not give all the information to their dashers and they have no benefits for their dashers, so most dashers quit at DoorDash.

l) Who are the dashers?

Dashers are people who work for DoorDash and transport food to customers by using the software developed by DoorDash and they get paid for this service.

m) Is there a safety program at DoorDash?

DoorDash has a safety program for their dashers, where they can pick up any phone call from customers and do not need to go into the restaurant again to drop off food.

n) Why does DoorDash work with restaurants?

DoorDash works with restaurants to provide food delivery service to customers, and they can decrease competition from fast food companies such as McDonald‘s by working with them.